Impact of Globalization on trade and commerce

Impact of Globalization on Trade and Commerce: Critical Study

This article on ‘Impact of Globalization on Trade and Commerce’ was written by an intern at Legal Upanishad.


Globalization is described as an extension of the broader local and nationalist view of interconnected global markets with an unlimited flow of cross-border capital, products, and services. Alternatively, globalization can be characterized as the shrinking of the world or the greater unification of the global economic system by removing trade barriers such as tariffs, import quotas, and export taxes.

Globalization does not impede the liquidity of the free market. However, when applied to a fragile economy, it can be harmful. When done correctly, globalization leads to a more equitable world order in which wealth is shared equally between the rich and the poor. On the contrary, if the weak are conquered and the strong remain strong, it can have a significant impact on the international order.


The term “globalization” refers to the growth of numerous domestic markets and international networks that are part of the socio-economic system. The word “globalization” was first used in the 1930 pamphlet entitled “Towards a New Education”. The term “globalization” was used to characterize the transition to a more interrelated and interdependent economy after the Cold War. Globalization is the foundation of the international political economy that results from changes in the nature of products and assets. Key elements of globalization include trade agreements, cross-border flow of funds, migration patterns, technological developments, and information dissemination.

Globalization influences immigration patterns by leading to potential worker migrants and migrants due to the volatile production costs of the labor market. As technology rapidly becomes more prevalent with new processes and alternatives in product manufacturing, it is important for organizations that spread technology and manage their international business. However, globalization can also be described as the transfer of power from the national level to the superstate level  (Reich, 1998). Foreign direct investment and portfolio investment in international companies make globalization more feasible.

Impact of Globalization on trade and commerce

Globalization has helped companies become more competitive in the market. Companies compete for the price and cost of a product or service, the quality of the product or service, manufacturing technology, target markets, and other variables. Companies that can deliver products and services at the lowest possible cost and price while maintaining high quality will succeed in the global market. Ultimately, your company’s market share will increase. Globalization has increased the market competitiveness of companies. Globalization is increasing the use of technology in developing and developing countries.

For example, globalization allows wealthy countries to invest in developing and developing countries. Developed countries have introduced their own technologies and are using them in manufacturing, agriculture, and other industries in developing and poor countries. It supports emerging and developing countries by boosting economic growth.

The amount of possibilities accessible throughout the country is expanded as a result of globalization. As the number of departments and resources expands, people will grow. The industrial expansion has increased the number of employment opportunities available to individuals, and more people get economic benefits from international travel. This also accelerates immigrants that provide individuals to individuals for economic and social growth. The rise of overseas plant countries is a valuable business, so it helps to grow industrial cities and local cities that should be welcome in all countries.

For example, foreign investors are investing heavily in some companies. The industry spends money on research and development, increasing the technology for the production and expansion of the industry.

Impact of Globalization on trade and commerce
Impact of Globalization on trade and commerce

Organizational performance is also defined as the survival and profitability of an organization, and the main measurements are both manufacturing and service. Service companies’ efficiency and performance are measured by customer satisfaction, and such companies prioritize strong relationships over profits. Manufacturers are primarily focused on maximizing profits, but their key performance and effectiveness lie in the quality of their products.

The effect of globalization on the global enterprise is decreasing exchange and funding limitations. When an employer sells items or offerings to clients in different countries, that is called a global exchange. Foreign direct investment (FDI) occurs when an employer engages in industrial hobbies in different countries. Many exchange limitations are primarily based totally on elevated taxes on imported synthetic merchandise or offerings.

Tariffs are used to guard local industries from overseas competition. As an end result of globalization, all countries have banded collectively to decrease exchange and funding boundaries among them. This has been excellent for all international locations because it lets them exchange and make investments greater readily.


Globalization is a process that has the ability to spread throughout the globe. The process does not have to cover the entire globe to be related to the phenomenon of globalization, but it must have its ubiquitous potential. You should be able to determine how far the globalization process has progressed. It is also related to efforts to quantify globalization and explain its focus on economic globalization. In addition, technological improvements brought about by market economy growth, domestic politics, and economic stability have triggered and supported the globalization process.

The globalization process creates new or modified governance bodies that strive to become true globalists and take the opportunity to reduce the costs incurred by the globalization process. The process of globalization becomes an independent variable over time, and new or updated governance bodies become dependent variables. Governance changes, on the other hand, can unleash new factors that can affect the speed and scope of the globalization process. Finally, globalization is a very practical feature of the New World Order, one of which has the most important impact on the future development of any country or country. 

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